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What’s The Deal With Dollar Stores?

This week TWICE released its 2016 Top 100 CE Retailers Report, in which two “dollar stores,” Dollar Tree (No. 91) and Dollar General (No. 94), cracked the tech-channel ratings.

The growth and popularity of the dollar-store model in today’s digital age has not gone unnoticed by Field Agent, an Arkansas-based secret-shopper and marketplace intelligence service. Here’s what consumers had to say about the format, as reported by Field Agent’s Chris Medenwald:

Dollar stores are a ubiquitous — and important — feature of the U.S. retail landscape.

Alone, Dollar General and Family Dollar account for over 20,000 stores across the country. (If I just had a dollar for every dollar store…)

Not even McDonald’s boasts that many units.

So what are the attitudes and behaviors of shoppers toward dollar stores?

On May 14-15, Field Agent surveyed 500 shoppers (divided evenly between men and women) to find out.

One objective was to understand the omnichannel potential of the dollar store model. Today, scores of retailers are developing more sophisticated omnichannel capabilities, as they seek to serve shoppers seamlessly across multiple formats  — in-store, online and, most notably, via mobile.

But is there an omnichannel future for dollar stores, we wondered?

Below we share some of the results of a 15-question, quick-fire Q&A.

In conjunction with the survey, we also dispatched several agents to dollar stores where they took pictures of displays, prices, and planograms. They even conducted a video shop-along, which you can view by clicking here.

Quick-Fire Q&A: Dollar Stores

1. How many people shop at dollar stores?

A whopping 97 percent of respondents in our survey shop at dollar stores. Of those, 34 percent do so “often,” 39 percent “sometimes,” and 24 percent “rarely.”

2. How does age and income level influence dollar store usage?

Among millennials, 31 percent said they “rarely” or “never” shop at dollar stores compared to 17 percent of baby boomers. Moreover, 46 percent of shoppers with household incomes under $35,000 said they “often” shop at dollar stores, in contrast to the 30 percent in the over $50,000 income category that do.

3. Which major dollar store chains are tops among shoppers?

In our survey, 81 percent of survey respondents said they shop at Dollar Tree, while 64 percent shop at Dollar General and 53 percent at Family Dollar.   

4. What do shoppers purchase from dollar stores?

At 56 percent each, respondents said they purchase party supplies and home cleaning supplies at dollar stores more often than any other product category, with candy/gum (51 percent), office/school supplies (48 percent), and salty snacks (45 percent) rounding out the top five. 

5. When do shoppers visit dollar stores? 

At 46 percent, “to save money during tight times” was the top occasion for shopping at dollar stores, followed by “for holiday purchases/special occasions” (43 percent); “to save time when I’m in a hurry” (42 percent); and “to purchase just 1-2 items for daily living that I’m out of” (41 percent).

6. What do shoppers like most about dollar stores?

In a word, prices. At 63 percent each, low prices and simple pricing schemes (e.g., everything in $1 increments) crested the list for things shoppers like most about dollar stores. 

7. What do shoppers like least about dollar stores?

The store environment, including store cleanliness (40 percent), the clientele (26 percent), and store atmosphere (25 percent) were the chief dislikes.

8. How do private-label brands fare at dollar stores?

Thirty percent in our study reported purchasing private-label brands from dollar stores.

9. What sentiment do shoppers associate with dollar stores?

Almost half (49 percent) said they feel “satisfied,” and 40 percent feel “smart” when shopping at dollar stores. An additional 30 percent reported “relief”— as in, “I’m relieved I didn’t have to go to a larger, busier store.” Yet 23 percent said they feel “cheap” shopping at dollar stores.

10. Do shoppers use digital services offered by dollar stores?

Forty-seven percent indicated using one or more digital services offered by dollar stores — from the basic (e.g., visiting a dollar store’s website) to the more sophisticated (e.g., using a dollar store’s mobile app to download coupons).

11. How many have purchased items from a dollar store’s website?

Only 3 percent in our survey have made a purchase from a dollar store’s website for home package delivery.

12. How many have downloaded a dollar store’s mobile app?

Six percent said they have downloaded a dollar store’s app to their smartphone, with the same number saying they’ve used the app while inside the store. Likewise, 5 percent have used a dollar store’s app to view, download, or use coupons. 

13. What omnichannel services would shoppers find most appealing for dollar stores to offer?

Shoppers were presented five increasingly common omnichannel services (e.g., in-store pickup, curbside pickup) and asked how appealing they find each option. More than half (57 percent) of shoppers said they find the possibility of a dollar store smartphone app that offers the ability to download coupons, locate stores, and shop via their phone either “extremely” or “very” appealing, making it the most appealing omnichannel possibility in the survey. 

14. What would shoppers buy from dollar stores either online or through a smartphone app?

At 38 percent, home cleaning supplies was the most commonly selected category for online or app purchase, followed by toilet paper/paper towels and office/school supplies (36 percent each); party supplies (35 percent); and laundry/dishwashing supplies (34 percent).  

15. How eager are shoppers for dollar stores to start adding more digital, omnichannel services?

Thirty-two percent of respondents said they’re either “extremely” or “very” eager for dollar stores to join the omnichannel age and start offering more digital services. In contrast, 41 percent said they’re only “slightly eager” or “not at all eager.”

Chris Medenwald is a research analyst and marketing manager at Field Agent, which leverages a panel of more than 700,000 consumer “agents” to gather data and insights from around the world.

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